Nippon Seiki, the instrument-cluster maker listed on the TSE Standard market, told shareholders it will borrow ¥50bn from MUFG Bank to pay for its acquisition of Toyo Densou, the electronics supplier it agreed to buy in April. The loan is unsecured and due to be signed on September 28, 2026, with repayment due exactly one year later on September 28, 2027.
The money comes with a string attached. Nippon Seiki must keep its consolidated pretax profit out of the red for two consecutive fiscal years, starting with the year ending March 2027, or it risks tripping the loan's financial covenant.
| Feature | Detail |
|---|---|
| Lender | MUFG Bank |
| Principal | ¥50bn (unsecured) |
| Planned signing date | September 28, 2026 |
| Repayment deadline | September 28, 2027 |
| Collateral | None |
| Financial covenant | No two consecutive years of consolidated pretax loss, starting with the year ending March 2027 |
A one-year maturity on a ¥50bn facility is short by design. Nippon Seiki said it plans to refinance the borrowing into longer-term funding before the repayment deadline arrives, but that refinancing has not been arranged yet. Until it is, the company is effectively running a 12-month clock on the ¥50bn loan, with a lender-imposed profit floor sitting on top.
Nippon Seiki also said it is still working out how the borrowing, combined with consolidating Toyo Densou, will affect its group earnings. The company said it will disclose promptly if it identifies a material effect on results. For now, the acquisition's financing is set; its consequences for consolidated earnings are still under review.